This is the second article in the “Guide to HR Technology” series.  The goal of the series is to provide information on the state of HR software in 2021 and how it can positively impact your organization.  This article will explain tech jargon and the function of HR software in an organization. 

So Many Acronyms!

The tech industry is rife with jargon for software products and features.  In the HR technology space, there are three common acronyms for software:  HRMS, HRIS, and HCM.

HRMS = Human Resources Management System

HRIS = Human Resources Information System

HCM = Human Capital Management

In today’s market, there are no distinct differences between HRMS, HRIS, or HCM software. 

Some examples of HRMS/HRIS/HCM software are:

  • UKG Ready, UKG Pro, and UKG Dimensions
  • Workday
  • SAP SuccessFactors
  • ADP Workforce Now and Vantage HCM

There is another acronym to be aware of – ERP.

ERP = Enterprise Resource Planning

Some ERP software may have overlapping features with HCM software, but it is by nature a different type of application. 

Some examples of ERP software are:

  • SAP S/4 HANA
  • NetSuite
  • Microsoft Dynamics ERP
  • Plex ERP

What does HCM software do?

At its core, HCM software is a database of employee information.  Instead of filing cabinets full of employee files, the same information is stored and organized digitally.  Instead of paper forms, employees can fill out and sign forms electronically.  Routine HR tasks, such as new employee onboarding, can be done faster and with more compliance.  Let us compare an all-paper onboarding versus onboarding using an HCM:

Paper Onboarding
  • The HR manager must print the onboarding documents, which include:
    • Form I9
    • Federal W-4
    • State and Local tax forms
    • Direct Deposit information form
    • Employee Handbook and Acknowledgement
  • For the government forms, the manager must keep up-to-date versions and ensure all fields are filled in correctly. 
  • A voided check or bank letter may be requested from the employee to ensure the account information provided is accurate and valid.
HCM Onboarding
  • The HCM creates and maintains up-to-date, electronic versions of Form I9, Federal W-4, State and Local tax forms.
  • These forms also have controls programmed in to prevent employees from filling them out incorrectly.
  • The employee enters their direct deposit account information and the HCM will verify the routing number is legitimate and entered correctly.
  • A digital version of the Employee Handbook is available to download at any time and the employee can electronically sign the acknowledgment form before their first day of work.

Even more complex HR tasks, such as performance reviews and employee incidents, can be handled digitally using an HCM. 

As HCM software evolves, the types of tasks it can handle expands.  Today, it is common for HCM software to have features for:

  • Timekeeping and Time Off Requests
  • Payroll Processing
  • Benefits Administration
  • Recruiting

HCM software impacts every department and employee in an organization – not just Human Resources.

If you would like more information on how your organization can leverage the power of HCM software, we are here to help!  Click the “Schedule an Introduction Meeting” button at the top of the page to get started.